August 22, 2019

What is a CHIP Canada Home Income Plan Reverse Mortgage?

What is CHIP Canada Home Income Plan?

What if you had the money to pay off debts, help your children buy a home, to travel, or just do more of the things you wanted to do?  CHIP Canada Home Income Plan / Reverse Mortgage Canada could be the solution for you.  It’s the simplest and sensible way to unlock and use your home’s equity and turn it into a steady flow of income or a lump sum cash payment to help you enjoy life on your terms.

CHIP Home Income Plan is a reverse mortgage secured by the equity in your home.

It’s not like a traditional mortgage where you need to make regular monthly payments or qualify with your income.  You do not have to make any payments if you don’t want to – for as long as you or your spouse live in your home.  This is the reason why Canadian’s, like yourself, are taking advantage of this new method of using your home’s equity and reverse mortgage solutions to create more income and start enjoying your retirement.

Reverse Mortgage is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.

Receive up to 50% of the appraised value of your home. Based on your age and your spouse, the location and type of home, and current appraised value. Reverse Mortgage Quote to find out how much you could get from your home equity.

Did you want a monthly income cheque or receive a lump sum, it’s Your choice. You have the option of receiving a lump sum advance now or have a portion as a lump sum and the remainder as monthly.

The money is tax-free. It is not added to your taxable income so it doesn’t affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.

It’s your money! Spend it any way you like... Pay off your existing debts, create more monthly income, renovate your home, purchase a second home of cottage, take an extended vacation, help your children with their home purchases, use it as an investment or just have some extra income and spending cash per month.

No payments are required while you or your spouse live in your home. The full amount only becomes due when your home is sold, or if you move out.

You are always the Owner and have full control of your Home. You will never be asked to pay off your reverse mortgage, never asked to move out. It is your home as it has always been and you keep any continued growth in its equity. If you or your spouse were to pass on, the mortgage is still not payable so there is no financial interruption to your family.  Just continue enjoying your home.

Supplement your income with a CHIP Reverse Mortgage

Are you among those unfortunate Canadians who could not save the necessary cash for their retirement? If yes, you can preferable opt for the Canadian Home Income Plan (CHIP) to supplement some good income for your retirement.

According to the Statistics Canada, 77% of the net value of home equity owned by seniors or homeowners is never invested and remains tied up Therefore, if you do not have enough fund available for your post-retirement expenses, CHIP can help you to utilize some part of the home equity to access income that is absolutely tax-free.

The fund you receive through CHIP does not levy any tax on you because you will be using your equity of your home for which you have already paid the required tax from the cash you used to purchase it. Additionally, the income you receive through CHIP is not an earned income and therefore is never considered taxable in any of the tax calculations in the following years. It also does not restrict you from receiving your other retirement benefits from either Old Age Security (OAS) or Canadian Pension Plan (CPP).

There are a few ways you can choose for gaining your retirement income through CHIP. You can opt for receiving payments periodically from CHIP for a specific period of time as agreed up on by you and CHIP. Alternatively, you can also choose to receive the entire amount against your home equity as a lump sum. In the later method, you can invest that lump sum amount or save it in your account and withdraw as and when you need. However, it is advisable to consult a financial advisor to understand which option is suitable for you.

CHIP offers you best solution in situations when you have less saving for your retirement and want to supplement the some good amount of cash for your retirement. For more information, please Contact Us or you can also Request a Quote Online.

Start Enjoying Your Retirement! Canada Reverse Mortgages

A reverse mortgage is a widely emerging option for people who are more than 60 years old and have their own house. Canada reverse mortgages simply considers the equity of the property owned by the borrower. This scheme allows the borrower to get dept-free cash without having to sell the owned property. However, it is important that one should understand the various aspects related to reverse mortgage prior to applying for a loan.

In general, there are a number of reasons one would like to secure a reverse mortgage:

  • One may want to develop income by making new investments.
  • It can be a medium of preserving investments for future income and growth.
  • It helps in eliminating huge debts by a lump sum flow of cash.
  • There may a need for immediate funding to establish new projects.

In Canada, the process of obtaining cash through reverse mortgage has become simple. In this process, the lender organization checks for your age, the equity of your property, and a few other factors that are necessary to be eligible for the mortgage. If you are with your spouse, your spouse too needs to meet the age requirement to make you both eligible for the loan. Essentially, the only reverse mortgage program working towards this entire process is Canadian Home Income Plan, also commonly referred to as CHIP. It ensures that you have a smooth processing of your mortgage loan towards getting you the best rates for the equity you have defined.

Unlike the normal mode of availing mortgage loans where you are required to make regular payments monthly, in case of Canada reverse mortgage you get paid and the amount you receive is absolutely tax free. Neither you nor your spouse needs to make repayments regularly, since your equity provides the required security against the reverse mortgage you get. Based on CHIP’s regulations, if you are eligible for a reverse mortgage loan, you can receive up to 40% of your home value. So, the amount you can get purely depends on your age and your spouse’s age, the condition of your house and its locality, the appraised value and debts against your house, etc.

While opting for Canada reverse mortgage, you have the flexibility to decide how you would want to receive the loan amount.  Once the reverse mortgage loan amount is decided and approved for you, you can choose to receive the entire amount as a lump sum, in two or three phases, or in a planned withdrawal process. Any of these ways of receiving the loan amount depends on your requirements and reason for applying for a reverse mortgage. You or your spouse never needs to make a repayment of the amount you receive till the time you stay in the home. However, if you decide to sell your property or move out, you must make a full repayment of the loan you have taken.

You are free to decide for what purpose you want to use the loan amount you have received. Canada reverse mortgages have all the flexibility of no regular repayments and no tax against the loan amount. However, it is always recommended that one should discuss with a mortgage broker to understand the advantages and disadvantages of a reverse mortgage ontario.

Canada Reverse Mortgages is your trusted CHIP Home Income Plan Lender. We work with seniors and their families all across Canada. Our dedicated staff of account experts will consult with you over the phone or in person in the convenience of your home.  With same day approvals and funding in as little as days, this is the only call you have to make 1-866-920-2012.  With our relationships with all lending institutions and banks, we work with your branch and financial planner to allocate the funds where and when needed.

Our team is ready to help you whether you are located in a large center or a small town.  Some centers we service are Toronto, Mississauga, Brampton, Markham, Caledon, North York, Etobicoke, Ontario, and Ottawa.

For more information, please refer to our FREE CHIP Reverse Mortgage Guide, or contact us.